LAS VEGAS -- There are two annual events that anchor the geek calendar. For the fanboys, you have San Diego Comic Con, the grand gathering that transforms America's Finest City into a fabulous four-day freakshow of collectors, cosplayers and self-styled cultural critics ("Finest City? Worst...city...ever!").

And for the clickster crowd, there's the Consumer Electronics Showcase in Las Vegas. Last week's CES brought together some 2,500 exhibitors, who unveiled more than 20,000 products to an audience of over 120,000 attendees. The vast bulk of these were industry professionals, looking hawkishly over one another's shoulders to gauge the competition, and earmarking features and functions for later photocopying.

But it's not the village residents who get the red-carpet treatment at CES; it's the visiting outsiders -- the 5,000 analysts and journalists, who use the show to identify "hot products" and "big stories" for the following year's coverage. The benefits that come with a press badge include free use of a lounge equipped with all-day coffee and snacks; complimentary lunch, if you get there early enough to beat the locust swarm; access to exclusive press events -- the Sony session featured an all-too-brief live performance by teen diva Taylor Swift; and invitations to garish evening showcases featuring open bars, bounteous buffets and body-painted hostesses.

The price one pays for these privileges is that you do, in fact, actually have to work the floor, and that floor is enormous: CES sprawls over more than 1.9 million square feet, all of which has to be walked, foot by painful foot, against staggering shoulder-to-shoulder crowds. (Next year: Segways for everybody!)

This makes it all the more frustrating when the "hot" products are lukewarm at best, and "big" stories come up short. "I cannot believe I flew 5,200 miles to file a story about fookin' e-book readers," groused one U.K.-based tech journalist, to a chorus of nods from his similarly irritated peers.

Too much of what was being displayed was, at best, the physical introduction of technologies that had originally demoed at last year's CES -- like 3D television, featured by just about every flat-panel vendor at the show -- or, worse yet, me-too refinements of technology already widely in the marketplace.

A shift in the center of gravity

That's not to say there wasn't a narrative worth following out of CES; it's just that it didn't lie in the array of also-rans and probably-nots that made up most of the offerings from top-tier brands this year. Or, more precisely, it lay between the lines of those offerings.

You see, the big gorilla at CES has traditionally been Sony, the most prominent marque from consumer electronics' dominant territory, Japan. But this year's consensus best-of-show designation didn't go to the big dog, whose dark, vaguely blah booth featured humdrum new intros like the Dash -- a digital picture frame on steroids -- and the Bloggie point-and-shoot vidcam -- a Flip with a more cringeworthy name.

No, the clear winner was Samsung, whose enormous, glam-packed pavilion contained a huge sculptural bloom built out of the company's new 11mm-thick 9000 series LED-lit LCD TVs, set up in a kind of mirrored cathedral apse to wildly psychedelic, somewhat dizzying effect. Inside the booth itself, Samsung had an array of real innovations arranged by use case and product category.

One area featured mobile products like the MyFit combo MP3 player and personal fitness coach, a slim handheld that offers both music tuned to the beat of your exercise as well as a bank of sensors that can track everything from your pulse, stress factor, body-mass index and caloric consumption to your melatonin level.

Alongside the MyFit: The slick IceTouch personal media player, whose upper half is a translucent active-matrix OLED display (text and images seem to float within the see-through glass -- hardly utilitarian, but off the scale in sex factor).

Other areas demonstrated Samsung's 3D-capable TVs and laptops, its interactive motion-aware gaming technologies, its new app store (offering widgets that can run on everything from mobile phones to connected televisions and Blu-Ray players), and mobile digital TV.

"Samsung is innovating in so many areas, some of them really nontraditional," says Jin Chang, senior director of trends for retail electronics giant Best Buy. "There's such a creativity and cleverness in the products they showed. It's not just tech for the sake of tech -- it's thoughtful, it's beautifully designed, and it's rooted in real understanding of what the consumer wants."

Financial reports offer further evidence that Korean companies are ascendant, while Japanese ones are adrift.

For its fiscal 2008 year, which ended March 31, Sony lost a record $3 billion -- and forecasts similar gloom for 2009. Panasonic did even worse, losing a record $4.3 billion; Toshiba, $3.5 billion; Sharp, $1.3 billion.

Meanwhile, Samsung in 2009 earned an amazing $9.64 billion on revenues of more than $120 billion, the most in the company's history, while its Korean peer Lucky Goldstar, which rebranded itself as LG ("Life's Good") in 1995 to better position itself as a world brand, is expected to announce similarly shining results when it posts its 2009 numbers, given that it, too, has had a string of record-breaking profitable quarters.

So the numbers and the buzz tell the same tale, and it's one of woe for Japanese consumer tech. As Reuters reported, "Japanese executives [have] privately voiced a sense of crisis. Just a few years ago, one could walk through the Samsung booth feeling secure and smug, said a Toshiba Corp official. 'But each year, the booth becomes more showy, the products better-designed. And the price is still a challenge to match,' he said -- speaking on condition of anonymity."

The gadget gap, revisited

Back in 2004, I wrote a column called "The Gadget Gap," in which I explored some of the reasons why Japanese companies consistently originated the coolest consumer electronics products (and, more often than not, kept them restricted to their domestic consumers).

Little did I know then that the very next year, there would be a seismic shift in the CE world, as Samsung -- which had long labored as a low-cost "value" alternative to Japanese brands -- would see the fruit of a decade of hard refocusing and aggressive investment.

In 2005, Samsung for the first time knocked Sony off its perch as the king of the consumer electronics hill, seizing the status of top CE company in the world in Businessweek/Interbrand's annual survey of global brands.

N'Gai Croal, long the august voice of gaming and consumer tech for Newsweek and now principal of the consulting firm Hit Detection, says this transfer of brand power was gradual -- and inevitable. "If you look at the innovations that Sony has been associated with, the Trinitron TV set, the Walkman, the Discman, the Playstation -- these are legendary, iconic products, which changed people's experiences of how they were able to consume and enjoy entertainment. But Sony's been riding on those successes for a long time. Think about it this way: The Playstation came out in 1994. Well, what has Sony done lately?"

Unique circumstances gave rise to Japan's delirious innovation in the '70s, '80s and '90s -- market-wide creativity that transformed a country that had been crushed by war into the world's gadgetopia.

"Coming out of World War II, there was a generation of corporate leadership in Japan that was driven by the desire to restore the nation's place in the world -- to find new, non-military ways of asserting their influence," notes Best Buy's Chang. "And they saw technology as their opportunity to dominate. Japanese companies became immensely good at taking products and optimizing them, beginning with the transistor radio -- they didn't invent it, they just made it better."

This skill at torquing existing products, as well as Japan's later original breakthroughs, was rooted in a quintessentially Japanese business culture -- highly hierarchical, relentlessly competitive and largely resistant to outside input or influence. J-tech had a tendency to emerge out of a process of natural selection, with business divisions acting as rivals racing toward independent solutions -- each with parallel engineering teams and resources.

"This ended up being a successful business model for a long time," says Chang. "But all along, development cycles were getting faster and faster. And by the 90s, you had this situation where as soon as Japanese companies were putting out new stuff, it was already old technology -- or irrelevant to consumer expectations."

Meanwhile, by the mid-'90s, Korean companies were beginning to rankle at their role as bottom-rung players. Samsung in particular, led by then CEO Kun-hee Lee, launched an initiative in 1996 he called the "Year of Design Revolution" -- which he defined as a massive investment by the company in consumer research, marketing and industrial design, to enable a leap ahead into the first ranks of the electronics business.

Of course, Lee didn't know then that 1997 would see a near-total collapse of the Korean economy, with disastrous effects on Samsung and its peers. Within a year, Samsung shed 30 percent of its workforce -- some 24,000 people -- and shut down dozens of business units.

But this catastrophe contained within it the seeds of Korea's global technological resurgence. At Samsung, hundreds of millions had already been spent on the "Design Revolution" program, and with senior executives getting the axe and corporate concerns focused on saving the company, young guns at the conglomerate were getting a unique opportunity to wield authority and manage budgets with limited or no supervision from old guys in suits. Similar developments were occurring elsewhere in Korea's media and technology sectors: As things descended into chaos, unlikely individuals found themselves given unexpected creative autonomy.

They also had the benefit of the bold infrastructure investment the South Korean government had made just before the bottom dropped out, spending $1.5 billion in 1995 to build a nationwide, high-capacity broadband network, while giving its 45 million citizens subsidies to purchase home personal computers.

The net result: By 1998, when the economy began to right itself, hundreds of stealth projects engineered under the cover of the crisis began to emerge, while maverick executives incubated in a culture of risk and resourcefulness stepped up to more senior decision-making roles. The nation's formerly moribund entertainment industry began to surge with creativity; its technology industry flourished with design-driven, consumer-focused innovation. And all of it was woven through with basic expectations of universal connectivity and access, provided by Korea's ultra-cheap and ubiquitous national Internet.

"The strengths of Japanese companies like Sony were suited to the analog era," says Croal. "Back then, it was all about building the best product. But in a digital era, it's all about the network effect -- it's not as important to consumers that any individual product is superior, so much as that all of your different products work well together. Sony's single-minded focus on its own proprietary 'better' choices -- ATRAC instead of MP3, Betamax instead of VHS -- and its constant fight to lock things down and make it hard for people to control their own media, it was all at odds with where trends were headed in the marketplace."

Dragon on the horizon

Every passing of the consumer electronics torch in the past half-century has been rooted in the pairing of crisis and disruptive technological breakthrough. The crisis destabilizes the existing order; the new technology allows a hitherto marginal actor to step into the breach.

In the case of Japan, the crisis was World War II and its harsh postwar economic conditions; the technology was the transistor, which made low-cost, reliable solid-state electronics possible. In the case of Korea, the crisis was the Asia-wide currency crash and the subsequent need for bailout by the International Monetary Fund, while the technology was broadband, landline Internet.

This points to the other notable theme running through CES this year -- the moves by Chinese companies like Hisense, Haier and TCL to step up their game. Given that the conditions are now aligning for the next big power shift to occur -- we're just emerging from the crisis of the global synchronized recession, and new technologies, particularly cloud services tied to wireless broadband, are going mainstream -- the time may well be ripe for China to make its global move.

"You have to remember that China has been a major player in technology for decades," says Shawn DuBravac, chief economist and director of research for the Consumer Electronics Association, which organizes CES. "It's long been a critical cog in the CE supply chain -- it's where the world's electronics goods are being manufactured. And this year, we saw some very interesting things. Like the U.S., China injected a major fiscal stimulus into its economy, but it wasn't used to prop up banks, it was used to build infrastructure and drive technology into rural markets. Households in the countryside were getting as much as $1000 apiece to buy white goods and flat-screen TVs."

This, in a country where the average per-capita income among rural dwellers is less than $400, represented a game-changing investment, and one that set households that formerly existed outside of the electronics consumer space on the path of inevitable upgrades.

Chinese domestic manufacturers, whose products are priced at affordable levels compared to Korean and Western imports, got the bulk of the stimulus benefit. The government, in turn, has pushed these companies to aggressively plan for expansion abroad, hoping that their emergence as legitimate global brands will enhance China's international image.

The tip of the spear in this effort may well be Hisense, China's leading TV manufacturer, with more than 16 percent of the country's domestic market share (not insignificant in a country of 1.3 billion, in which 97 percent of households own televisions).

"We are 40 years old this year, and we have been number one in China for six years," says Stone Zhang, Hisense's director of multimedia products. "And we have been selling overseas now since 1998. In many cases, we have sold our products as private label goods, but we sell under the Hisense brand in markets that are ready to accept us. In Australia, in Africa -- the market accepts our brand very well. We're top five in Australia. So, we have taken a point-by-point strategy, not worldwide all at the same time."

But the signs are there that this expansion will proceed less cautiously in the very near future. In his keynote address at this year's CES -- the first ever delivered by a CEO from China, Hisense chairman and CEO, Zhou Houjian, declared his intent to make the company a "worldwide leading consumer electronics brand" -- increasing overseas sales by 300 percent over the next three years.

If Hisense, TCL and other Chinese companies take advantage of this opening, the next few years might well see a new set of insurgents emerge at the top of the CE heap.

"It's going to happen, but the question is how fast," says Andrew Lih, visiting professor at USC's Annenberg School of Communications and author of "The Wikipedia Revolution."

Lih, who spent the last half-decade in China watching as the Internet and other enabling technologies transformed that country's landscape, cautions that there are things Chinese companies still have to do to succeed as legitimate players in the global marketplace.

"Chinese companies are terrible at interfaces -- onscreen displays, menu navigation, that whole last meter to the consumer's eyeballs," he says. "And marketing, branding, customer service ... these are all things that Chinese firms don't get right very often. Then again, Chinese have only been capitalists for a few decades -- and they learn a lot faster than you might expect."

Hisense's Zhang believes that history is ultimately on China's side. "In the 1960s, after the Tokyo Olympic Games, a lot of Japanese brands became global brands," he notes. "In 1988, after the Seoul Olympics, Samsung, Hyundai, LG became global brands. And of course, last year we had the Olympics in Beijing. It is, I think, our time."